Neoliberalism in the American military and its impact on civilians

Over the past 30 years, American culture has increasingly drawn from the military model. Now, as even military pensions and health care are outsourced and privitized, what will be the fate of social welfare in America?

Many Democrats in the
United States Congress enthusiastically support the looming cuts to the U.S.
defense budget. They note the enormous costs of protracted wars in Iraq and
Afghanistan as well as the imprudence of lavishly funding an American military already
unmatched the world over. For many sound reasons, they view the reduction of
the defense budget in broad strokes as positive. But details of present defense
budget cuts contain specific proposals that ought to give them – and many
Americans – pause.

Folded into the current
military spending cuts is a neoliberal agenda to privatize and outsource the
retirement and health care benefits of military personnel and their families.
Americans may consider these proposals of minimal concern, and of interest only
to military personnel, veterans, and their families. But their implications reach
far wider: they are part of a comprehensive neoliberal plan to privatize
virtually all government social welfare programs and entitlements.

Promulgated by
free-market advocates at the Heritage Foundation, corporate interests on the Defense
Department’s Defense Business Board, and the private Business Executives for
National Security, current military health and retirement proposals seek to
replace existing government programs with privately-held, market-based
healthcare and pension programs. They closely mirror free-market proposals for
Social Security, pension privatization, and health care privatization in the
civilian sector.

Instead of using the
current government-contracted HMO/PPO model, called TriCare, military personnel
and their families would receive health care vouchers allowing them to either
purchase whatever health care plan they chose from an array of private sector
providers. Instead of earning defined retirement benefits – pensions –
soldiers, sailors, airmen and marines would each pay into privately held 401K
programs – or simply take a lump sum of cash. In a win-win for corporate
advocates, cuts to what they call the “excessive” and “burdensome” human side
of the military will simultaneously fund greater spending on expensive weapons
and communications systems. And under the pretext of providing “choice” to
military personnel, the programs decrease total benefits and increase private
sector access to government funds and the money of military personnel.

A brief history of neoliberalism
in the military

Americans have largely
missed this story of military neoliberalism. When they discuss military
outsourcing and privatization, they think of military service providers in
American wars – the “mercenaries” of Blackwater (now Xi) and DynCorp’s on
battlefields in Iraq and Afghanistan. But privatized pension and health care
proposals have a longer, deeper, and ultimately more powerful history.

For decades, the far
bigger and costlier story of neoliberalism in the military has lain not on
battlefields, but on military posts and bases across the world, where the banal
military support sector – everything from housing, installation management, and
recreation to generating pay checks, performing maintenance, and writing
reports – has been and continues to be sold off to the private sector.

Military contracting for
services grew steadily from the late 1980s onward, outstripping military
contracting for products (weapons, materiel) – traditionally the bulk of
military contracts – in the late 1990s. By the time the first stories of
“contractors on the battlefields” broke in 2002, the military was nearly ten
years into the process of outsourcing and privatizing everything from its
hotels and recreation centers, to its housing and maintenance, to its health
care.

The transfer of these military
services from the public realm to the private had its origins in free market
policy circles, beginning with economist Milton Friedman, who helped found the
all-volunteer force in 1973. At the time, free-marketers advocated ceasing all
military-provided, government-run support for soldiers (and their families),
from health care to housing to the Post Exchange, with some going so far as to
call the Army’s supports “socialist.”

Instead, they proposed
that soldiers use their salaries to “purchase” any support they wished “in the
market.” The military scoffed at the notion of fulfilling soldiers’ needs
through the private sector. At that time, support services were deemed central
to the success of the volunteer force – to its recruitment, retention, and its
readiness. American society did not provide (and still does not provide)
generous social benefits to all citizens in the manner of many European
nations, so the military argued successfully that military provision of these
services would cement soldier and family loyalty to the new institution.

In the 1970s and 1980s,
the Pentagon and the services constructed a formidable architecture of support
covering everything from health to housing, childcare to counseling. It was
nearly all managed by government personnel for the benefit of military
personnel, protected from the rising tide of conservative campaigns to cut
social spending.

While Friedman and his
acolytes failed to transfer military services to the private sector in the
1970s and the 1980s, free market advocates in the 1990s succeeded. Members of
the Defense Science Board and the Business Executives for National Security –
the same groups proposing current privatization of military pensions – used the
occasion of the post Cold War drawdown and the slumping economy to introduce
corporate boardroom practices such as cutting overheads, increasing
efficiencies, and improving “quality” as budgetary coping mechanisms for a
sharply reduced spending regime.

Vice President Al Gore’s
“Reinvention of Government” pushed these further, introducing widespread
outsourcing practices throughout federal agencies. President Clinton then
appointed Wall Street financiers like Joshua Gotbaum from investment firm
Lazard Frères to lead a special outsourcing office in the Pentagon. Together,
the policies of the Clinton era resulted in a historically unprecedented
transfer of military support services from the public to the private
sector.

The contracting out of
the Pentagon’s support coincided with neoliberal efforts to combat “dependency”
in the military. Policies forcing recipients of public assistance programs to
achieve “independence” – largely through mandating employment requirements –
had been gaining ground in conservative and neoliberal policy debates in the
late 1980s and early 1990s. They also took hold in the military, where in the
early 1990s the military retrenched its support for soldiers and their
families. As the Army pulled back on spending for support services and
contracted out services, for example, it also instituted programs to teach
soldiers and their spouses “self-sufficiency.”

At the same time, the
Army reframed its generous benefits and social services as efforts not to
provide “support” and “quality of life”, but endeavors to “promote readiness
and self-reliance.” The Army went so far as to change its motto from “The Army
Takes Care of Its Own,” to “The Army Takes Care of its Own so that They Can
Learn to Take Care of Themselves.” Soldiers and their families faced demands
not to “depend” on the military, even when the military deployed personnel for
military action.

The impact of
military neoliberalism on America

Current proposals to
reform military pensions and health care draw on this history of creeping
neoliberalism in the military while demonstrating the ubiquity and power of the
neoliberal agenda – even within an institution as influential as the American
military. Since 1980, national polling data has reported the growing trust
Americans have in the military as an institution. It has stood above all other
government institutions and functions as a source of perceived legitimacy, a
measure of its generalized cultural and social power within the United States.

For many years, this
power protected the military and its benefits from the fate of civilian social
welfare programs – outsourced, privatized, cut back and made stingier – as
military leaders made the case that military benefits deserved special
protection. But in recent years, neoliberalism has dissolved some of those boundaries.

With free-market
advocates now aiming at their pensions and pocketbooks, the military community
may reconsider the studied distance it has for years maintained from civilian
government workers and civilians in general. Military advocacy organizations
and the active duty brass have followed a cautious, narrow path toward
recognition and support in Congress, eschewing alignment with unionization and
opposing either comparisons or close connections to other federal workers. But
now that military personnel are facing free-market gambits to reduce and alter
their benefits, they cannot deny their shared fate alongside civilian workers.

Civilians, too, may pay
more attention to the fate of seemingly arcane military compensation, since the
conversion of military benefits to free-market models will not bode well for
most Americans. After all, if even vaunted soldiers, sailors, airmen and
marines – the “heroes” who “fight for our freedoms” in the words of American
presidents – can have their benefits outsourced and privatized, what will
become of the social programs protecting civilians? A wide swath of civilian
policies protecting economic security, health and well-being have come under
new assault by free market conservatives in the past two years – collective
bargaining rights, public pensions, health care, social security, to name a
few. How will the elderly or poor children resist the privatization of the
programs they rely on if military personnel cannot?

Time is of the essence
for Democrats to resist the free market reforms proposed in current defense
cuts. Once the military adopts neoliberal practices, Americans can expect them
to achieve even greater recognition and influence. In the past thirty years,
American culture has drawn increasingly from militarized models for everything
from entertainment, to private security, to juvenile justice. The same will
likely be true in government programs for social and economic security: the
more neoliberal the military’s social support system becomes, the more neoliberal
our civilian system becomes, too.

About the author

Jennifer Mittelstadt is a historian at Rutgers University who writes about social policy and the military in the United States.

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